The 2010s were a great decade for America’s big cities. The 2020 Census found that each of the top 25 cities in the country gained population. 14 of them had population growth of more than 100,000.

New York City led the way. Growing by an astonishing 629,000. Only 29 cities in America have a population of more than 629,000. New York City grew by about the total population of the city of Detroit (639,000) and three time more than the total population of the city of Grand Rapids (199,000).

New York’s 2020 population is 8.8 million. The most ever in the city’s history. More than all but 11 states. New York’s population is larger than the entire state of Michigan minus Oakland County.

The 2020 census count was conducted when New York City was getting hammered by COVID-19 and the press and social media were filled with stories that everyone was moving out of the city. Conventional wisdom had it that dense places––particularly big cities––were toast. Think again!

One of the dominant trends of the 2020 Census is that Americans are increasingly choosing to live in big metropolitan areas, most anchored by vibrant central cities. And those big metros with their vibrant central cities are also the most prosperous places in America.

The competitive advantage of big metros and their big cities was evident a decade ago. In a 2011 post about Manhattan, really all of New York City, I described that competitive advantage this way :

Manhattan is probably the highest cost place to do business in America. Not only high state and local taxes, but also high labor costs and, maybe most important, sky high real estate prices. In many ways it is the poster child for big government: big police and fire departments; big park system; public support for the arts; transit,transit, and more transit; one of the few cities with safety net programs over and above the state and federal safety net and on and on and on. Add to that lots of regulation, powerful public employee unions, lots of renters; sky high density; lots of immigrants, gays and folks of different races, religions and ethnicity and you have a recipe for what we are constantly told leads to economic disaster. Wrong!

Instead it is a place where knowledge-based businesses from across the planet are increasingly concentrating. It is one of America’s great centers of innovation and entrepreneurship. A place where the affluent (the 1%) and talent concentrate. It all adds up to one of the most successful economies in the country. So strong that it is the main engine of a metropolitan area of more than 22 million people (more than twice Michigan) in four states. A metropolitan area that is the third most prosperous big metro in the country, with a per capita income of more than $52,000. ($18,000 higher than Michigan’s.)

Turns out in the real world all those so-called liabilities are assets that lead to prosperity. A big city that works, a government that provides quality basic services and amenities, terrific alternatives to driving, density and welcoming to all. Combine those features with an entrepreneurial culture and you have a place where talent – from across the planet – wants to live and work. And where talent concentrates you get growth and prosperity, not decline and falling income and employment. To get back on the path to prosperity Michigan needs far more – not less – of what Manhattan has.

Michigan policymakers––from both parties––and Michigan business leaders, by and large, spent the last decade ignoring these Manhattan lesson. Pursuing instead a let’s make a Michigan low-cost place economic strategy. Clearly that strategy didn’t work.

The Census data makes clear that it is far past time for Michigan to put in place a new economic development strategy. Just as a decade ago, New York City offers the state a model for what the assets are that matter most to creating places where people want to live and to driving growth and prosperity.

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First, transportation policy must create access for Michiganders to meet their daily needs: jobs, healthcare, education, shopping, and civic life. For most that means well-maintained roads that are not a threat to people and their vehicles. But the reality is that not all of us have access to a car. In every Michigan community, there are some residents who do not own or drive a car—and more and more, as young adults reject a car-based lifestyle.

A survey of Millennials in 10 major U.S. cities released by the Rockefeller Foundation and Transportation for America in 2014 found that 80 percent of respondents agreed that it’s important for communities to have a wide range of options, including car- and bike-sharing, pedestrian- friendly streets, bike lanes, and public transit.

Making a new approach even more urgent is the fact that it’s clear that autonomous vehicles are coming. It is a question of when, not if. And that means radical change in the industry that drives Michigan’s economy, in how we live our lives, and how our communities are structured.

Lyft’s co-founder John Zimmer in a Medium article entitled “The Third Transportation Revolution” predicts: “By 2025, private car ownership will all-but end in major U.S. cities.” He writes:

As a result, cities’ physical environment will change more than we’ve ever experienced in our lifetimes. … The end of private car ownership means we’ll have far fewer cars sitting parked and empty. And that means we’ll have the chance to redesign our entire urban fabric. Cities of the future must be built around people, not vehicles. They should be defined by communities and connections, not pavement and parking spots. They need common spaces where culture can thrive — and where new ideas can be shared in the very places where cars previously stood parked and empty.

So the policy priority for the Michigan is not more money to simply rebuild its current transportation system, it is to find the political will to do what we did for most of the last century: be a global leader in building the transportation system for the future.

In particular, there is good evidence that light rail has the greatest potential to drive economic development, especially when carried out in concert with other community and economic development planning efforts. Politico describes the transformative impact of regional light rail in an article entitled, “The Train That Saved Denver: The car-choked city overcame regional distrust to build a major transit system that is remaking the urban core and the suburbs, too.” Author Colin Woodard writes that ‘Light rail has really moved Denver into the 21st century.”

In 1999, voters in Denver approved two bond measures to finance the highway and light rail system, demonstrating that residents are willing to pay for meaningful transportation investments. By 2006, the $1.67 billion Transportation Expansion Project had added 19 miles of light rail and pedestrian bridges, improved highway merging, and widened 17 miles of highway to relieve congestion and handle 300,000 vehicles per day. When the national recession and budget overruns threatened Denver’s plans to build a 21st Century rail system, then-Denver Mayor John Hickenlooper decided that the city only had one option: they had to go big.

In 2004, after a campaign that was largely led by Hickenlooper, metro Denver voters approved a plan to raise $4.7 billion to build FasTracks, a rail system that boosters believed would benefit the entire Denver region. Hickenlooper insisted that instead of building Denver’s system line by line, the region needed to accelerate plans to build a fully-functional, truly regional rail system to make itself more attractive to Millennials and job creators. The most recent addition to this regional transportation network came in April of 2016, when Denver opened a 22.8-mile spur from its airport to its downtown. Using a unique mixture of public-private partnerships, creative real estate deals and sheer political will, Hickenlooper and his allies pushed the region to create a state-of-the-art system that is widely credited with making Denver an economic growth hub.

Michigan’s current transportation system is far away from being world class on any of the attributes we just explored. Across the state we have a crumbing 20th Century road system; minimal public transportation, just the beginnings of walk- and bike-friendly communities, and, by and large, we have not used transportation as a lever to catalyze high-density neighborhoods and communities.

Our transportation proposals, most importantly, involve redefining the goal and the path of transportation policy. Once Michigan gets on a new path, the state and its regions will find a legion of expertise and experience from across the country on how to design, fund and implement a world-class 21st Century transportation system to help create places where people want to live and work.

Click here for the full report.

Photo credit: JKPhotogenic/Shutterstock.com.

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Our new report on creating places where people want to live and work argues that successful regions will be those that provide both kinds of neighborhoods and communities. The regions––no matter their size––that will be the most successful in retaining and attracting talent almost certainly will be those who offer a combination of high-quality high-density and high-quality low-density neighborhoods. The demand for high-density, walkable, transit-rich neighborhoods is not exclusive to central cities. The most successful regions are increasingly also characterized by inner ring suburban communities that provide walkable, dense neighborhoods.

Because having attractive, functioning cities must be a goal for the state, Michigan must align its economic development tools to foster urban redevelopment. Michigan cities have been so disinvested for so long, that they seriously lack in the amenities that knowledge workers want. Additionally, private developers still face challenges, costs, and risks in developing property in Michigan’s cities. While at some point the private market may stabilize such that the payoff will be worth these elevated costs, evidence suggests that it hasn’t yet.

We know how to create high-density, high-amenity, transit-rich neighborhoods, in both downtowns and inner-ring suburbs. National organizations like Smart Growth America, the Project for Public Spaces and the Urban Land Institute are a fount of knowledge about what to do and how to do it. In Michigan, for more than a decade, the Michigan State Housing Development Authority (MSHDA)-convened Sense of Place Council has brought together the relevant state agencies as well as local and state entities with placemaking expertise. They too have laid out what needs to be done and how to do it.

Fostering density

Some of the policy levers that other states have used effectively to create places where people want to live and work include:

Geographic targeting of incentives

Geographic targeting means strategically deploying state dollars for regions where growth is critical to the rest of the state. In Illinois, for example, the Business Location Efficiency Act increases, by ten percent, corporate income tax credits already offered under the Economic Development for a Growing Economy program for projects located near affordable housing and transit.^[i]

Subsidize developments that contribute to density, particularly brownfield redevelopment

Michigan needs to increase its investment in downtowns, which means paying attention to the special costs of those project. The Maryland Heritage Structure Rehabilitation Tax Credit Program, which offers developers tax incentives of up to 20 percent of eligible rehab costs, led to the redevelopment of 407 commercial structures—with over $1.02 billion in spending by developers between 1996 and 2008.^[ii]

 Zoning

Standard zoning codes have the effect of prohibiting the mixed-use, pedestrian facing development that creates walkable urban places.  One possible improvement lies in the implementation of form-based codes, which can promote walkable urban development, and have been adopted in many places (including Grand Rapids) as overlays to the existing zoning codes.^[iii]

Promote housing in downtowns

Successful walkable places by definition include housing, of which there is not a sufficient supply in Michigan’s downtowns. The State of Michigan could help promote downtown housing by commissioning market studies and communicating the expected demand, making it easier for developers to feel confident in their investments.

Tax Incentive Evaluation

Michigan should also be making decisions on what tax incentives to grant based more on whether they retain and attract talent, rather than whether they retain and attract jobs. Since it is talent, not just numbers of jobs, that drive economic well-being. According to the Pew Charitable Trusts, 23 states have passed laws that require transparent measurement of their tax incentives between 2012 and 2016. We should consider a similar measure.

Encouraging regional decision making

As we wrote earlier, the desirable mix of infrastructure, basic services and amenities will differ from region to region. So Michigan’s diverse regions need the resources and flexibility to develop and implement their own strategies to retain and attract talent. It’s an essential ingredient to their future economic success.

In the Great Lakes, the best example of the power of regionalism is metro Minneapolis, the most prosperous region in the Great Lakes, by far. It has arguably the most powerful regional governance in the country. Regional collaboration, an elusive goal in many metropolitan areas, is on steroids in the Twin Cities. As we detail in our metro Minneapolis case study:

The seven-county Minneapolis metro area has been providing key governmental services, including waste- water treatment and transit, regionally for decades through what experts say is a unique entity called the Metropolitan Council, which recognizes that issues span political boundaries.

Unlike most regional planning agencies around the country that are organized as councils of local governments, the Met Council, as it’s known locally, has 17 members who are all appointed by the governor under state law. It is “more powerful and influential than any similar body in the United States,” said Minn-Post, a nonprofit news organization in Minneapolis.

Over time, the Met Council took on responsibility for operating the regional sewer and transit systems, and administering federal low-income housing vouchers. It also has purchased tens of millions of dollars worth of parkland and open spaces for a regional park system, created in 1974, that now includes 53 parks and 340 miles of interconnected trails.

Another unique aspect of regional collaboration in the Twin Cities region is a tax-base-sharing program known as Fiscal Disparities that requires nearly 200 local entities to share a portion of property tax dollars generated by industrial and commercial growth in the metro area. Fiscal Disparities is credited with reducing competition among local governments for development, helping less wealthy communities provide quality government services and allowing for better land-use planning.

The Met Council and Fiscal Disparities are seen as national models of regional cooperation and key elements in making metro Minneapolis one of the most livable regions of the country.

What metro Minneapolis teaches us is that:

• Regional governance is the result of state policy. Both the Met Council and Fiscal Disparities were created by state legislation
• Some essential services are best provided and paid for at the regional level
• Tax based sharing is an effective lever to reduce within region competition––which does nothing to grow the economy––for business location and in insuring that all parts of a region are able to better provide needed infrastructure, basic services and amenities.

Click here to read the new report on how Michigan can help its communities become talent magnets.

Photo credit: Alisafarov/Shutterstock.com.

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It’s driven by talent.

The high-wage jobs and innovative companies that will define opportunities for prosperity now and in the future are the most dependent on one thing: the brainpower of high-skilled workers. Those companies, more and more, follow talent.

We recently looked for a quick answer to a question that we figured someone else had put together: where do college-educated millennials live? But we didn’t find anything that satisfied us. So we decided to pull some data and take a look.

We used the 2015 one-year American Community Survey data for every metropolitan statistical area (MSA) in the country. MSAs look different around the country, but they are areas characterized by high population density, with an area of even higher density at the core. Communities within an MSA are highly economically connected. So, the Detroit MSA is actually a six-county area including and around Detroit, and includes the cities of Dearborn and Warren. The Grand Rapids MSA includes the four counties of Ottawa, Barry, Montcalm, and Kent.

We were interested not in where college-educated Millennials are a disproportionate part of the population, but in the simple question of where they are, by the numbers. If we want to know what they are looking for—what attracts them—this is the purest answer. There are 14,970,508 college-educated Millennials in the country, out of our total population of 316.5 million. Where do most of those 15 million economic drivers live?

The Top Ten Cities for College-Educated Millennials

A whopping 36 percent of them live in one of ten Metro areas. In other words, the ten MSAs who have the greatest number of college-educated Millennials have over one-third of the entire country’s population.

It would be easy to explain this simply as, “Bigger cities will have more of everything.” To some extent that’s true. Except that: (1) It doesn’t make the fact that college educated Millennials are choosing big cities somehow irrelevant. It’s the main thing these people are choosing: lots of people, high density, and a strongly urban lifestyle. And (2) Each of the top ten metros—and many of the others—has a higher share of educated Millennials than its share of the nation’s population. New York, which has 9.4 percent of the nation’s college-educated Millennials, has only 6.3 percent of the nation’s population. LA has 4.2 percent of the college educated Millennial population, but 5.0 percent of the total population. Cities #5 and #6, the Boston and San Francisco MSAs, are the highest over-performers in this measure: they have almost twice the share of Millennials as they hold share of the population.

1. New York-Newark-Jersey City
2. LA-Long Beach-Anaheim
3. Chicago-Naperville-Elgin
4. DC-Arlington-Alexandria
5. Boston-Cambridge-Newton
6. San Francisco-Oakland-Hayward
7. Philadelphia-Camden-Wilmington
8. Dallas-Fort Worth-Arlington
9. Houston-The Woodlands-Sugar Land
10. Atlanta-Sandy Springs-Roswell

We also added up the number of college-educated 25-34 year-olds in all of the remaining metros that have a total population over one million (in 2015, there were 53 metros above this threshold). The remaining MSAs in the top 53 list host 33 percent of the college-educated Millennials in the country. Then 25 percent of the nation’s college-educated Millennials live in the remaining Metros.

This means that only six percent of college-educated Millennials live outside of an MSA.

Michigan’s Metros

Detroit was the 14^th largest MSA in the 2015 data, but 17^th in terms of college educated Millennials. Meaning it’s still not getting nearly it’s share—let alone a higher proportion, like the top performing cities are—of educated young people. Grand Rapids does slightly better in terms of proportion (0.34% of the nation’s educated Millennials, and 0.32 percent of the nation’s population).

When you look at the data and see that only six percent of the brains that will drive the future economy (because businesses will go where they go) choose to live somewhere besides a metro—and that over a third of the nation’s college-educated Millennials are being attracted by ten of the largest metros—there’s just no way to ignore what this means for Michigan. For the state to have a healthy, growing economy, Grand Rapids and Detroit need to become denser and provide a more robust urban lifestyle. There isn’t another path to prosperity for our state.

Read about how we think Michigan should respond right here.

The post Where Do College-Educated Millennials Live–and What Should Michigan Do About It? appeared first on Michigan Future Inc..

H.B. 2007 would preempt residential downzoning in cities, meaning a neighborhood couldn’t seek lower density than its current status. It would also preempt cities or counties from banning accessory dwelling units or duplexes in neighborhoods zoned for single-family homes.

That’s a laundry list of obstacles that developers nationwide face in building new homes in supply-strapped cities. H.B. 2007 would take the question out of the hands of local government, where lawmakers are often shackled by the wishes of NIMBY homeowners who don’t want to see more housing (and more people) in their communities. Essentially, by stripping cities of authority, the state is protecting its cities from their own neighborhoods.

I am normally an advocate for increasing local control, not decreasing it—especially in Michigan where it often seems the best interests of cities like Detroit are not exactly the driving force behind our legislature’s decision-making. But I find this approach interesting because it is a response to decreasing housing affordability, which has reached crisis levels in Portland. Poor people simply can’t afford to live there without spending a large portion of their income on housing. HB 2007 “fast-tracks” a development’s permitting process if it includes affordable housing. And by ensuring that multi-family units can’t be easily prohibited from single-family neighborhoods, the bill fosters increasing density and helps support affordability.

The Strategic Importance of Cities

The bill also acknowledges that our cities play an important strategic role in the economic development of the state and that growing major cities ability to attract and retain talent is critical to the state’s goals. Our report on how to make Michigan a high-prosperity state once again shows that ensuring our cities are places where talent wants to live and work is essential.

A lot of what Michigan needs to do to improve our cities is encourage “placemaking,” the infusion of character and activation into public spaces that is usually the result of increasing density and walkability. A risk of this bill is to historic preservation–an ethos and set of tools that are essential to providing that sense of authentic character in a city. Advocates in Portland seem split on the extent of danger HB 2007 enables, but there is reason to be cautious.

Improving Economic Integration

A serious benefit is the potential for greater economic integration, by decreasing the local power that that those in affluent neighborhoods have to curtail new affordable housing in their neighborhood. Integrating neighborhoods is one of the key levers identified in our recent report on how to improve outcomes for Michigan’s kids. And affluent NIMBY’ers fighting new housing density is a problem that exists in certain Michigan cities already (think Ann Arbor) and could start to exist in certain neighborhoods of Detroit, if not the city as whole.

I’m not sure Oregon’s approach would be the right policy solution for Michigan. But it’s an interesting experiment, and I’ll certainly be watching for the results—if it passes.

The post New bill in Oregon addresses housing affordability–by limiting local control appeared first on Michigan Future Inc..

I believe that the University of Michigan is a better asset than UW Madison. By creating a quality of place that is more attractive place to live they have leveraged their assets better than Ann Arbor.

We use Madison as a comparison for both Ann Arbor and Lansing/East Lansing both because of the major research university and to take cold weather off the table. Lots of folks think Michigan can’t compete for talent because of the weather, don’t believe it. But in terms of development policy a better model is Portland, Oregon. They have developed the playbook for land use.

Their four decade long strategy has three anchors: a greenbelt to control sprawl, a high density/walkable central city (particularly in their downtown and near downtown neighborhoods) and transit. The result: a city that is both regularly rated one of the “greenest” in the country and a talent magnet. (See this Wall Street Journal article on Portland still attracting young talent even in a down economy. It’s not just jobs that attract mobile talent!)

In environmentally conscious Portland you see high density (yes even tall buildings) development everywhere in and around the downtown. They understand if you want both to be kind to the environment and economic growth the recipe is to limit low density suburban/exurban growth and encourage a high density central city. It’s the way to get folks out of cars and to make transit (particularly rail) financially feasible.

Ann Arbor seems to have convinced itself that it’s good for the environment to restrict growth both outside the city and in the city. But then the only way you can grow is if new workers demanded by new and growing enterprises live further and further away from the city. Which means longer commutes all by car. So much for being kind to the environment.

That assumes that new workers want (or will accept to get the job) to live further and further away from the city. The evidence is an increasing proportion of college educated adults – the workers most needed by the knowledge-based enterprises that Ann Arbor wants to attract – don’t want/won’t accept that kind of low density/long commute living. The trend nationally – that Brookings has labeled bright flight – is a preference for central city living, particularly in high density, mixed use, walkable neighborhoods with transit. That is why vibrant, dense central central city neighborhoods is central to economic growth. Without a larger pool of talent Ann Arbor won’t get the economic growth it wants.

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